October 2018: Knowledge Economy M&A and Equity Market Update

By Ramone Param, Director, Equiteq

  • Major deals profiled include Cognizant’s acquisition of Softvision, NTT Data’s acquisition of Sierra Systems and Accenture’s acquisition of TargetST8.
  • Equiteq advised Copperman on its sale to Decision Inc. and Essential Design on its sale to PA Consulting.
  • The Equiteq Knowledge Economy Share Price Index fell over the month, along with other broader market indices.

Cognizant announces transformational acquisition of Softvision from Tower Arch Capital

Target: Softvision is a global provider of end-to-end digital products and solutions that works with a variety of blue-chip companies. The business has a network of 2,850 professionals with a significant presence in Romania.

Buyer: Cognizant is a US-headquartered global technology services firm.

Deal Value: $550m

Deal Insight:  The deal expands Cognizant’s offerings in digital and cloud services to better position it against more acquisitive digital competitors like Accenture. Cognizant will benefit from Softvision’s strong roster of client relationships and experience on high-profile projects. This includes the creation of a disruptive video-streaming platform and an iPad application for US-based healthcare provider Kaiser Permanente. The acquisition also expands Cognizant’s footprint in Romania. Softvision was previously owned by private equity Tower Arch Capital, which acquired the business in July 2015 for an undisclosed sum.

NTT Data acquires Sierra Systems, expanding its IT services capabilities in Canada

Target: Sierra Systems Group is the Canadian subsidiary of The Sierra-Cedar Group. The 700-person subsidiary provides a full range of IT consulting, systems integration and application managed services.

Buyer: NTT Data Services is a Japan-headquartered global technology services firm.

Deal Insight:  NTT Data has been selectively acquisitive over the last few years. In 2016, the buyer purchased Perot Systems from Dell in a $3.2bn transaction. The transformational transaction bolstered NTT Data’s presence in the United States. The acquisition of Sierra Systems builds NTT Data’s delivery capabilities into Canada. Sierra System also develops NTT Data’s capabilities in hot areas like Microsoft Dynamics, Oracle and ServiceNow consulting. The transaction is expected to close later this year.

Accenture bolsters its growing financial services digital consulting capabilities with acquisition of TargetST8

Target: TargetST8 Consulting is a professional services firm focused on corporate and commercial lending consulting and innovation services. The business is New York based and serves banks and investment firms across the US and Europe.

Buyer: Accenture is an Ireland-headquartered global technology services firm.

Deal Insight: Demand for knowledge-intensive services focused on the financial services sector is strong. It is driven by opportunities for professional services firms to service large financial institutions dealing with fintech and challenger banks’ market entry, increased regulatory demands and cyber security concerns. Financial institutions are also increasingly investing in new disruptive technologies like artificial intelligence and blockchain.

TargetST8’s proprietary digital lending offering, including artificial intelligence and robotic process automation solutions, will have been highly attractive to Accenture. The prolific buyer is growing its digital solutions focused on serving financial services clients. In 2017, Accenture acquired payments consulting and advisory firm First Annapolis Consulting. In 2016, Accenture launched a blockchain practice and acquired trading platform consulting provider Formicary.

Selected Knowledge Economy M&A announced in October:

Equiteq Knowledge Economy Share Price Index:

Are you a member of Equiteq Edge? It’s full of content to help owners of knowledge-intensive services companies prepare for sale and sell their businesses. Register here to gain full access.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.